CONNECT 2011 - Michael Shuman

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CONNECT 2011 featured Michael Shuman, one of the nation's leading experts on community economics.

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CONNECT 2011 - Michael Shuman

  1. 1. Revitalizing Cheshire County From the Inside Out A Serious Jobs Strategy10/13/2011 1
  2. 2. The Struggle Over Capitalisms TINA vs. LOIS10/13/2011 2
  3. 3. TINA–There Is No Alternative • Attract Toyotas • Prioritize Exports • Reassure Locals
  4. 4. Economic Development Today Top 46 ED Programs in 15 States Sorted by % Funds Going to Local Business
  5. 5. LOIS–The Alternative• LO: Local Ownership• IS: Import-Substituting Development
  6. 6. Dead-end Austrian town blossoms with green energy
  7. 7. Hardwick, Vermont
  8. 8. The Zingerman’s Story
  9. 9. Local Living Economies• Local Owned• BOTH Self-Reliant & Exporting• Socially Responsible
  10. 10. OverviewI. Why Embrace LOIS?II. How to Nurture LOIS?
  11. 11. I. Why Embrace LOIS? Business Subsidies in Lane County (OR) (mid-2003)$80,000$70,000$60,000$50,000 LOIS$40,000 30x TINA-Gross$30,000 TINA-Net$20,000$10,000 10x $0 Cost Per Job
  12. 12. Recent U.S. Stimulus Local$350,000 Global-Gross$300,000 Global-Net$250,000 Stimulus (High) Stimulus (Low)$200,000$150,000$100,000 $50,000 $0 Cost Per Job
  13. 13. The Importance of Multipliers Impact of $100 Spending (Austin) $60 $40 $20 $0 Borders BookPeople
  14. 14. The Jobs Verdict Study $ Circulated Locally: Local vs. Nonlocal OwnershipAustin (2002) 3.5Maine (2003) 5.0Chicago (2004) 1.6Toledo (2004) 4.0Iowa (2006) 1.6 (Jobs)San Francisco (2007) 1.4-1.7Phoenix (2007) 2.9Grand Rapids (2008) 1.6New Orleans (2009) 2.0AVERAGE 2.6
  15. 15. Harvard Business Review July-August 2010
  16. 16. Other Reasons Ownership Matters• Smart Growth• Tourism• Entrepreneurship• Civil Society• Political Participation
  17. 17. Typical Skepticism
  18. 18. Recent Competitiveness of Local (By Jobs) 100% 90% 80% 70% 60% Small 50% Big 40% 30% 20% 10% 0% 1990 1994 1998 2002 2006
  19. 19. Profitability of Local in 2006 (Net Income/Net Revenue)25%20% Sole Proprietors15% Partnerships10% C-Corporations5%0%
  20. 20. Future Competitiveness of Local
  21. 21. Our CurrentPrivate Investment Strategy
  22. 22. Household Finance $ 26 Trillion in 2009 $2 Bonds $1 Stock $7 Mutual Funds$12 Pension Funds Life Insurance $4
  23. 23. Household Savings Here
  24. 24. The Impact of $4+ Billion Shift
  25. 25. II. How To Nurture LOIS?Planning Plug the leaks.People Support LOIS entrepreneurs.Partners Compete through collaboration.Purse Harness pensions locally.Purchasing Spearhead “Local First” campaigns.Policymaking Remove anti-LOIS biases.
  26. 26. Hannah Grimes WorkPlanning Industry ClustersPeople Business Incubators Entrepreneurship Classes & HubPartners Leadership Circle BALLE NetworkPurse Angel Investors Network Giving MonadnockPurchasing Marketplace Buy Local GuidesPolicymaking
  27. 27. Wealth from Leak Plugging The 25% Shift: The Benefits of Localizing Food In NE Ohio
  28. 28. 25% Shift Re-employs 27,000 Jobs 8,493 9,998 Farmers Retailers Processors Other4,081 5,091
  29. 29. Direct $$$ BenefitsEach year… …$868 million in wages …$4.2 billion output …$126 million of state and local tax
  30. 30. Indirect $$$ Benefits• Tourism • Fiscal Health• Business Magnet • Improved Infrastructure• Entrepreneurship • Rural Development• Unemployment Benefits • Economic Security ($127 million)
  31. 31. Other Benefits • Environmental • Public Health • Global Image
  32. 32. Other Benefits • Environmental • Public Health • Global Image
  33. 33. Other Benefits • Environmental • Public Health • Global Image
  34. 34. Leak-Plugging Potential Here Indicator Data for Cheshire County Employees (August 2011) 39,903 Self-Employed (2009) 5,818 Unemployed (July 2011) 2,425
  35. 35. Leak-Plugging Potential Here Indicator Data for Cheshire County Employees (August 2011) 39,903 Self-Employed (2009) 5,818 Unemployed (July 2011) 2,425 Potential New Jobs (Direct) 17,640 Potential New Wages $840 million (Direct)
  36. 36. Examples of Leaks Indicator Potential Jobs for Cheshire CountyOffices of Physicians 480Limited-Service Restaurants 360Commercial Banking 360Temporary Help Services 297Engineering Services 187Hotels and Motels 175Wired Telecommunications Carriers 158General Warehousing and Storage 146Custom Computer ProgrammingServices 144Department Stores 141
  37. 37. Opportunities for Local Food
  38. 38. Low-Cost “Meta-Business”• Supports All Local Businesses• Revenue Generating• Modest One-Time Investments
  39. 39. Purchasing Metabusiness B2B Marketplace
  40. 40. Partners Metabusiness Purchasing Coop
  41. 41. Purse Metabusiness Small-Stock Issues
  42. 42. People Metabusiness Self-Financing Incubator
  43. 43. Zero-Cost Economic Development• Selective Procurement Lifetime Cost Accounting: Actual Bid Price = Nominal Bid - Taxes
  44. 44. Zero-Cost Economic Development• Selective Procurement• Bid-Out ED $$$
  45. 45. Zero-Cost Economic Development• Selective Procurement Examples: - Loosen DPOs• Bid-Out ED $$$ - Coop Investment - Petition SEC• Securities Reform
  46. 46. Choose Wisely
  47. 47. Patrick Henry: (with minor edits)“Why stand we here idle?Is life so dear or peace sosweet as to be purchasedat the price of chains…?Forbid it, Almighty God. Iknow not what courseothers may take, but asfor me, give mecommunity or give medeath!"
  48. 48. For More Information: Michael Shuman 202-669-1220 shuman@igc.orgwww.cuttingedgecapital.com www.livingeconomies.org

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